Tennessee Bankers

This Week Newsletter

August 29, 2016 - Issue No. 1635

ABA, ICBA Urge CFPB to Withdraw Arbitration Proposal

ABA and ICBA, in separate comment letters, urged the CFPB to withdraw its proposed rule limiting the use of consumer arbitration agreements, arguing that it is not in the public interest and ultimately would not protect consumers.
The rule as proposed would prohibit customers from waiving their ability to participate in class action suits, which would permanently increase the number of class action lawsuits and raise legal costs by up to $5.2 billion over five years, according to the bureau's own estimates. Many banks include mandatory arbitration clauses in their credit card and deposit account agreements to manage the unpredictable costs of class action lawsuits.
With arbitration likely to disappear under the rule, ABA said in its joint letter with other industry trade groups, the CFPB would also impose burdens on customers whose claims cannot be resolved through class actions, instead requiring them to go to court for minor, nonsystemic disputes.
ICBA wrote that it would not be economical for community banks to continue subsidizing arbitration for customers if they are forced to carry the high costs associated with class-action lawsuits. ICBA said it is concerned that the proposed requirement to report certain arbitration data to the CFPB could lead to the reidentification of consumers and the release of sensitive personal and financial information. Read ABA's comment letter. Read ICBA's comment letter.

CFPB Responds to Senate Letter on Tailored Regulation

CFPB Director Richard Cordray replied to a letter sent by a bipartisan group of 70 senators, including Bob Corker (R-TN) that urged the bureau to exempt community banks  from certain regulations. The letter cited a provision of the Dodd-Frank Act allowing the bureau to exempt "any class" of entity from its rulemakings.

In his response, Cordray stressed that the Dodd-Frank Act also charges the bureau with enforcing consumer financial protection laws "consistently" in order to promote fair competition. However, he also listed actions the CFPB has taken to tailor regulations, including an expanded safe harbor for small creditors, expanded exemptions for rural and underserved areas, relaxed appraisal requirements for small creditors, and a HMDA reporting exemption for lower-volume depository institutions.

Cordray noted the CFPB's required use of Small Business Review Panels in its rulemakings, its Community Bank Advisory Council, and the compliance resources posted on its website. "[T]he Bureau recognizes that community banks did not cause the financial crisis," Cordray concludes. "For that reason, the Bureau is committed to ensuring that the regulations that we promulgate are well-tailored and effective." Read Cordray's letter. Read the senators' letter.

CFPB Issues Guide and Best Practices to Help Communities Create Protection Partnerships for Seniors

The CFPB released a report that found that hundreds of counties around the country have developed coordinated community-based efforts to prevent, detect, and respond to elder financial exploitation. The report found that a strong collaboration among community stakeholders–like financial institutions, adult protective services, and law enforcement–can be very effective in protecting their older residents from financial exploitation. To help other communities across the country create their own protection partnerships to fight elder financial abuse, the CFPB also released a resource guide and best practices.


TBA and bankers just concluded participation in roundtable discussions with the the Tennessee Commission on Aging, Adult Protective Services, and other interested agencies across the state on financial exploitation of elders. The discussions focused on best practices for detecting and deferring exploitation of elders.

FDIC 'Matters Requiring Board Attention' Decreasing

FDIC examinations are seeing far fewer write-ups of Matters Requiring Board Attention, the agency said in the summer issue of its Supervisory Insights publication released last week, although corporate governance-related MRBAs are on the rise. The share of FDIC exam reports at satisfactorily rated banks that include MRBAs has fallen from 55 percent in 2011 to 36 percent in 2015.

MRBAs are down substantially for lending-related issues, although MRBAs related to concentration risk are more prevalent than before within the loan category. However, MRBAs have increased substantially over the past five years for board and management issues; more than half of satisfactory exam reports in 2014 and 2015 included a governance-related MRBA. Nearly half of the board or management MRBAs addressed policies, with other large shares focusing on audit and strategic planning. MRBAs have also risen for liquidity and Bank Secrecy Act issues. Read the FDIC's Supervisory Insights.

Senior Bank Marketing Series Scheduled for September 7

How does your bank view its future?  In the Senior Bank Marketing Series, you will share in the opportunity to exchange ideas and learn best practices placing your company ahead of the game when it comes to the most current strategies, tactics, and proven results for marketing your bank's business.

Possible discussion topics include:

  • Marketing to millennials 
  • Mobile services—we can offer more here 
  • More on branch transformation 
  • Specific email marketing

The first session begins September 7 at Nashville's TBA Training Center. To register, contact Debbie Brickles

Tailgate with TBA

It's tailgate time in Tennessee! Brought to you by the Young Bankers Division, all Tennessee bankers and football fans are invited to join TBA for two tailgates this fall. Hosted by SouthEast Bank in Circle Park, the UT tailgate will be September 24 when the Volunteers take on Florida. The annual Tennessee Titans tailgate will be October 16 before the Browns game, hosted by Baker Donelson. If you're attending either of these games, or will be in the area, come on by the TBA tailgates to say hello. For more information, contact Stacey Langford.

Order Your 2017 Bank Holiday Closing Signs

TBA produces professional holiday closing signs for the standard holidays observed by the Federal Reserve. Posting the signs at each entrance to your main office and branches, as well as drive-through windows, will alert your customers to the bank being closed. The signs are 5" x 7" in size and adhere to any glass or wood surface without leaving residue upon removal. The cost of each 2017 Holiday Closing Sign set is $25.50 for TBA Members, plus shipping and handling and sales tax. Deadline for ordering is Friday, October 14. The signs will be shipped in mid–November. Click here to order.

TBA-Office Depot Discounts Now Apply to 800+ Items

Good news for members of the TBA Office Depot program. This week we added 76 new items to the steeply discounted core list. These items are in the CBFS (Cleaning, Breakroom, Facilities Solutions) category and include things such as cleaners, sponges, dusters, etc., as well as several products from Flavia including brewers, coffees, and teas. These new additions bring the TBA-Office Depot core list to 800+ items. In addition to these core items, individual customers have the opportunity to add 75 items that are specific to their ordering habits to create a customized list of steeply discounted items.  To learn more about the TBA Office Depot partnership and the significant savings you can enjoy, click here, contact Office Depot's Kevin Delesk or TBA's Stacey Langford.

TBA On the Road

  • The second session of the first class of the Executive Development Academy convenes in Nashville.
  • TBA President Colin Barrett will speak to the ATA Bankers Conference in Jackson on Tuesday.

See where TBA goes while "on the road" by following  @TNBankers.